Tags: California | Gasoline | Brown | Standards

Plunge in California Wholesale Gas Portends Lower Pump Prices

Monday, 08 October 2012 08:13 AM EDT

Average California gasoline prices scaled yet another record high, an auto organization said on Monday, but wholesale prices signaled the likely end of soaring prices in the largest market for gasoline in the United States.

The average California pump price had risen by just over a penny from a day before to $4.668 per gallon for regular gasoline, up 50 cents from just a week before, according to the American Automobile Association website early on Monday morning.

The spike in prices has been so jarring for the state that it prompted one senator to call for a federal investigation.

But wholesale gasoline in the Los Angeles spot market plunged 60 cents a gallon on Monday, one day after California Governor Jerry Brown authorized the sale of winter-blend gasoline more than three weeks early.

"Retail prices will come down as hard as they went up," said David Hackett, president of Stillwater Associates, an energy consultancy in Irvine, California. "It went up 56 cents in a week, it will come down that fast."

A string of local refinery troubles has constrained supply in the state, which is not linked to national pipeline and refinery networks. The return of Exxon Mobil Corp's 149,500-barrel-per-day Los Angeles area refinery on Friday, after an Oct. 1 power outage, also helped to bring prices down.

That shutdown fell against the backdrop of lower output from Chevron Corp's 245,000-bpd plant in Richmond, California, which has had its key crude refining unit shut down for two months because of an Aug. 6 fire.

Southern California bore the brunt of the supply disruptions last week and faced the highest prices in the state, with $5 per gallon spotted in some areas.

U.S. Senator Dianne Feinstein, in her call on Sunday for an investigation by the Federal Trade Commission, pointed out that California commuters already pay the highest gasoline prices in the country, while also going through the longest commutes.

The U.S. national average price for regular gasoline was $3.818, according to AAA on Monday.

© 2024 Thomson/Reuters. All rights reserved.

Average California gasoline prices set another record high Monday, but wholesale prices signaled the likely end of soaring costs at the pump.
Monday, 08 October 2012 08:13 AM
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